Thanks a lot for such a informative guide !!!! I am new to this site and joined just today, but been trading and investing for past 8 years. But never used any technical analysis for my trading and delivery.
Even now i do scalping in 4-5 slected stocks of my choice which have high volume and momentum.
I have never used the indicators u mentioned here.
I just observe the order book/ order flow and based on that i execute my trade.

I just wish to know whether theres some very simple indicators / formulas for scalping in scrips like unitech ( scrips below rs 100) where i can do several trades at a difference of 15 paise( my total brokerage and taxes etc comes to arround 6 paisa for both side).

my aim is to trade in arround 3000 qty of unitech at a differnce of 15 paise for 15-20 times in a day.

Thanks

Originally Posted by radha55

Intraday trading using Breakout Method

What is breakout? What is breakout method?
A rise in a price of security above a certain level called as resistance or a drop below a certain level called as support is called breakout. A breakout is used to signify a continuing move in the same direction. It can be used by technical analysts as a buy or sell indicator.

Look at the image below for graphical explanation.

How can breakout help us in intraday trading?
Every trading underlying has a trading range at any day. In other words, on any given day, the trading underlying will move between two prices (high and low). Our main strategy should be to trade the underlying when it is about to start its biggest move for intraday (May it be upside or downside). To explain this, let us take a very simple example
Example 1: The stock ABC is trading at 100 at any point of time during the day. In another half hour it starts its sharp upward movement and creates new high. Our main strategy should be to catch a part of that sharp move (we cannot take the benefit of entire sharp upward movement or downward movement. And this is what we try to do with breakout method. We try to take benefit from a small part of sharp upward movement or downward movement.

If you look at the above image, you will find two important lines. (Upside Breakout and Downside Breakout).
What this line means to us is, if price moves above upside breakout, we will buy the underlying (long) and if the price moves below downside breakout, we will sell the underlying (short).
As you can see, when price moved above upside breakout, it went more up and made a new high.